4 ms·

The greater issue is we allow the richest to basically print money via their stock based compensation, which allows them to turn unrealized gains into loans bac

The greater issue is we allow the richest to basically print money via their stock based compensation, which allows them to turn unrealized gains into loans backed by these stocks. They can spend that all they want to influence politics and wield illegitimate power. If they can spend this wealth, they can be taxed on it. Make stock buybacks illegal again too. Overturn Citizen's United unless the head of the company can face charges for the actions of their company. The concentration of wealth into the highest strata is a recipe for societal collapse seen multiple times in history.

gruez 8mo ago
>The greater issue is we allow the richest to basically print money via their stock based compensation, which allows them to turn unrealized gains into loans backed by these stocks. How's this different than if CEOs or whatever were paid in cash, and then they immediately bought stocks with the cash?
- MSFT_Edging 8mo ago
  Because you had an income to tax. The stock compensation is to avoid paying taxes on their income.
  - jonas21 8mo ago
    You owe the same amount in income taxes regardless of whether you're paid in stock or cash. I think you're confusing this with the case where founders or early employees own large amounts of stock that they received early on in the company. They paid little to no taxes when they received it because it was worth basically nothing at the time. Later, the company has grown and it's worth a lot, so they have a large unrealized gain that they can use as collateral for loans. But that certainly wasn't guaranteed to happen. Most startups fail.
  - knollimar 8mo ago
    Don't you pay taxes on those when they vest?
cindyllm 8mo ago
[dead]
interestpiqued 8mo ago
This only works if stocks go up, up, and up. Otherwise they will have to realize gains at some point to pay off the loans. I don't get why we have to jump all the way to a wealth tax, could they not just force asset backed loans to trigger a tax? This seems way more targeted and we won't have people assessing what everyone is worth. I think it would avoid some unnecessary precedent setting. They could put the impetus on the billionaire taking the loan to state what the assets are worth and related gains.
- ozlikethewizard 8mo ago
  While I think I actually support this, does capitalism not cease to function if you put barriers in place to prevent the growth of capital. Think trying to get that passed would be even harder than a wealth tax.
  - MSFT_Edging 8mo ago
    One should ask if the forever growth is actually sustainable. How much further can we optimize life for the sake of perpetual growth?
samiv 8mo ago
Also the way QE works is that the rich companies and individuals are the ones who can take out large loans against their previous economic assets as collateral and leverage that money in the market such as the AI bubble. They also are the first to spend the new money so the inflationary effects only kick in after they've taken out then loans. The wage earners feel the inflation in their wallets.
taeric 8mo ago
This hints at a major misunderstanding that, frankly, drives me nuts. If people are getting paid in stock, they pay taxes on the value of the stock they are paid with. Can they take a loan on existing stock? Yes. You can leverage assets and this, itself, leads to some pretty unfair things. No need to inflate it to the idea that "getting paid in stock means you don't pay taxes."

gruez 8mo ago

>The greater issue is we allow the richest to basically print money via their stock based compensation, which allows them to turn unrealized gains into loans backed by these stocks. How's this different than if CEOs or whatever were paid in cash, and then they immediately bought stocks with the cash?

MSFT_Edging 8mo ago
Because you had an income to tax. The stock compensation is to avoid paying taxes on their income.
- jonas21 8mo ago
  You owe the same amount in income taxes regardless of whether you're paid in stock or cash. I think you're confusing this with the case where founders or early employees own large amounts of stock that they received early on in the company. They paid little to no taxes when they received it because it was worth basically nothing at the time. Later, the company has grown and it's worth a lot, so they have a large unrealized gain that they can use as collateral for loans. But that certainly wasn't guaranteed to happen. Most startups fail.
- knollimar 8mo ago
  Don't you pay taxes on those when they vest?

cindyllm 8mo ago

[dead]

interestpiqued 8mo ago

This only works if stocks go up, up, and up. Otherwise they will have to realize gains at some point to pay off the loans. I don't get why we have to jump all the way to a wealth tax, could they not just force asset backed loans to trigger a tax? This seems way more targeted and we won't have people assessing what everyone is worth. I think it would avoid some unnecessary precedent setting. They could put the impetus on the billionaire taking the loan to state what the assets are worth and related gains.

ozlikethewizard 8mo ago
While I think I actually support this, does capitalism not cease to function if you put barriers in place to prevent the growth of capital. Think trying to get that passed would be even harder than a wealth tax.
- MSFT_Edging 8mo ago
  One should ask if the forever growth is actually sustainable. How much further can we optimize life for the sake of perpetual growth?

samiv 8mo ago

Also the way QE works is that the rich companies and individuals are the ones who can take out large loans against their previous economic assets as collateral and leverage that money in the market such as the AI bubble. They also are the first to spend the new money so the inflationary effects only kick in after they've taken out then loans. The wage earners feel the inflation in their wallets.

taeric 8mo ago

This hints at a major misunderstanding that, frankly, drives me nuts. If people are getting paid in stock, they pay taxes on the value of the stock they are paid with. Can they take a loan on existing stock? Yes. You can leverage assets and this, itself, leads to some pretty unfair things. No need to inflate it to the idea that "getting paid in stock means you don't pay taxes."